| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP6347
|
| DP6347 Capital Controls and Foreign Investor Subsidies Implicit in South Africa's Dual Exchange Rate System |
| Eric Schaling; Harry Huizinga
|
| 发表日期 | 2007-06-22
|
| 出版年 | 2007
|
| 语种 | 英语
|
| 摘要 | It is widely recognised that the "one-size-fits-all" monetary policy of the euro-zone is a potential problem. How much of a problem has not been much investigated. It is argued in this paper that it may result in the euro not being sustainable in the longer term without drastic changes to other aspects of the EU and, in particular, to fiscal policy. The problem is not the fault of the ECB, but is due to having a single nominal interest rate. As a result, the evidence reveals that national price levels are diverging over time which is leading to a permanent and unsustainable loss of competitiveness. A formal theory of inflation in the euro-zone based on an open-economy version of the New Keynesian model is used to analyse the problem. Although the euro system has automatic stabilising mechanisms arising from the changes in competitiveness and from absorbtion effects, these are shown to be not strong enough. The model is then modified to allow for fiscal transfers between countries and the size of the transfers required to produce a euro that may be sustainable are derived. It is shown that, in effect, this is an inflation tax, requiring high inflation countries to make transfers to low inflation countries as often happens within a single country in the form of unemployed benefits to low activity regions. Ultimately, the choice may lie between closer political union and a break-up of the euro-zone. |
| 主题 | International Macroeconomics
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| 关键词 | Euro
Ecb
monetary policy
inflation
|
| URL | https://cepr.org/publications/dp6347
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/535179
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推荐引用方式
GB/T 7714 |
Eric Schaling,Harry Huizinga. DP6347 Capital Controls and Foreign Investor Subsidies Implicit in South Africa's Dual Exchange Rate System. 2007.
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